Whenever the subject of DEI (Diversity, Equity, and Inclusion) or DEIB (B for Belonging) is raised, it’s easy to get the histrionics going on both sides. This column won’t take a side but instead, raise what economists refer to as “opportunity cost” and how it relates to Nielsen.
There is no faster way to lose reader interest than to write about anything involving economics, also known as “the dismal science.” I once read a list of “rules of thumb” that said to never invite more than five economists to a university cocktail party because they kill the conversation.
It’s easy to understand the concept of “opportunity cost.” If you spend a lot of money on a lavish vacation, you may not be able to buy something else you wanted. That Porsche Macan in your driveway costs much more than a Chevrolet Equinox. You made a choice…the vacation and the Porsche created “opportunity costs” that prevented you from spending on something else.
For Nielsen, DEI represents an opportunity cost. The company has a pretty robust DEI presence with multiple VPs and above in roles that either use that term (DEI) or subparts of it. My previous comment on this topic was a June 2023 column where I excoriated Nielsen for taking public positions on the representation of minorities in media. Nielsen is the “umpire”, in other words, a neutral, impartial party. Since that column, I haven’t seen Nielsen “take sides”, at least not in public.
But by having multiple DEI executives within Nielsen and likely a few more people to support the higher-ups, Nielsen made a choice. Now that the company is owned by private equity, you can bet that every expenditure is scrutinized. If Nielsen is big on DEI, what are Nielsen’s opportunity costs?
I was chatting with a friend who recently called Nielsen Audio customer support about a data question. The wait was long and the person who finally answered was not a native English speaker. It’s well-known that Nielsen has moved as much of their operation as possible offshore as a cost-saving measure, so he likely was talking with someone in Mexico. After some back and forth, the customer service rep admitted to having no knowledge about what he needed. Yeah, my friend was pissed. That’s just one incident, but if you look at the number of Nielsen Audio people who have been told to find other employment in recent years, the ability of the company to support clients has been reduced.
I’m not suggesting going back to the “good old days” of Arbitron when there were more sales reps and no matter the size of your market, you could count on the rep’s annual market visit. Software support was 24/7 and while that did not mean the same as the original “Jake From State Farm” who was taking calls at an office desk at 3 AM, insomniac programmers who had software questions at odd hours knew someone was on call and could give cogent answers in between yawns.
Then there were the industry studies. Arbitron paid for numerous industry studies so that radio could better understand how audiences behaved. When was the last Nielsen-supported radio/audio study conducted? I’ll wait patiently for an answer.
I’ve argued for some time that Nielsen Audio is an ATM for the rest of the company. There is no serious competition, but the TV/video side of the business was under assault. Recently, Nielsen has had some major successes in video between MRC accreditation for the use of first party and big data as well as signing a new contract with Paramount after a long negotiation.
A few weeks back, I suggested Nielsen may want to invest more in audio after their recent triumphs on the video side. And please don’t bring up the “three minute rule” for PPM as an investment as that’s a software change. The heavy lifting was convincing the industry (including agencies and advertisers) that it was a good move.
Back to opportunity costs. Maintaining a group of DEI (or inclusion or whatever term you wish to use) executives means something else doesn’t happen at Nielsen. That’s a conscious choice by the company.
In January, Nielsen released a report entitled “Engaging Black Audiences: How Brands Impact, Grow, and Win with Inclusion.” I don’t have the full text, but trade press reports suggest there was a lot of good information about black audiences and ad spending in urban radio. The report was released with quotes from a Nielsen VP of Diverse Insights and Partnerships. Could this report have been released with quotes from Jon Miller, VP of Audience Insights, or Rich Tunkel, the managing director of Nielsen Audio? Would anyone notice a difference? Both have long and deep radio experience.
I can’t say if the Nielsen DEI group also handles some internal duties but that seems likely. When Nielsen took over Arbitron in 2013, we were introduced to the concept of “affinity groups” such as groups for racial and ethnic minority employees, gay/lesbian, and veterans. While anyone could join any group, as a straight white man who did not serve in the military, I didn’t bother.
In 2015, I remember Nielsen sent out ice creams trucks to some of their larger offices to celebrate the Obergefell (gay marriage) Supreme Court decision. Personally, I found that strange because it’s safe to assume some employees didn’t agree with the decision and having a company “take sides” on a controversial issue might leave them as “outsiders.” I was out of town on that day but heard reports that the ice cream was good.
If you’re a Nielsen client, think about it this way with respect to opportunity cost: Would you rather that Nielsen invest in a robust DEI operation that includes “customer facing” elements or would you prefer that the money be used for, as examples, US-based customer support with people who understand your business, industry studies, better representation of minorities in samples (for example, adding an “Asian” category to the radio survey) or some other purpose not mentioned here?
Please don’t answer “more sample” as there is no way Nielsen’s DEI spending could make a serious contribution to improving sample sizes. It’s Nielsen’s money and their decision, but customer input matters.
Now that you understand “opportunity cost” in this context, what’s your viewpoint?
Let’s meet again next week.
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